Manhattan Associates and SAPA COMPARATIVE ANALYSIS

IMAN TAYLOR, NICK ANTONUCCI, SERGE NGATTA, VLAD RUSANOV

Background Information

SAP• Founded in 1972 • Based in Walldorf, Germany• Leader in enterprise software and

software-related services • Global presence with locations in

more than 130 countries

Manhattan Associates• Founded in 1989• Based in Atlanta, GA• Develops and markets supply chain

commerce software• Member of the S&P 600 Technology

Sector

* Data compiled from Value Line, SAP 10k, MANH 10k

Background Information – Offerings

SAP Manhattan Associates

* Data compiled from Value Line, SAP 10k, MANH 10k

Top Line Financial Summary - Balance Sheet

SAP Market Cap: $95 billion LT Debt: ≈ $16 billion Working Capital: $594 million Current Ratio: 1.07 Quick Ratio: 0.94 Do not carry inventory Leverage Ratio (Assets/Equity): 670.60

Manhattan Associates Market Cap: $1 billion LT Debt: $0 Working Capital: $90 million Current Ratio: 1.99 Quick Ratio: 1.81 Do not carry inventory Leverage Ratio (Assets/Equity): 4.24

* Data compiled from Bloomberg data

Top Line Financial Summary - Income Statement

SAP 3 Yr Sales Growth: 11.92% 3 Yr Earnings Growth: 14.20% Profit Margin: 18.59% 2012 Revs: $22 billion ($4.21/shr)

2012 EPS: $3.42

Manhattan Associates 3 Yr Sales Growth: 15.11% 3 Yr Earnings Growth: 27.11% Profit Margin: 3.66% 2012 Revs: $376 million ($4.91/shr)

2012 EPS: $0.68

* Data compiled from Bloomberg data

Tech Sector Rev Growth: 9.24% Tech Sector Ern Growth: 13.30%

Profit Margin Trends

SAP Manhattan Associates

* Data compiled from Bloomberg data

2012 2011 2010 2009 20080

5

10

15

20

25

30

SAP Profit Margin (Millions)

2012 2011 2010 2009 20080

0.51

1.52

2.53

3.54

4.5

MANH Profit Margin (Percent)

Revenue Analysis

2012 2011 2010 2009 20080

50

100

150

200

250

300

350

400

MANH Revenue (Millions)

2012 2011 2010 2009 20080

5000

10000

15000

20000

25000

SAP Revenue (Millions)

Net Income Analysis

2012 2011 2010 2009 20080

2

4

6

8

10

12

14

16

MANH Net Income (Millions)

2012 2011 2010 2009 20080

1000

2000

3000

4000

5000

6000

SAP Net Income (Millions)

Top Line Financial Summary – Cash Flow Statement

SAP Return on Assets: 11.28% Return on Equity: 21.02% FCF/ Share: $3.54 (2.62% CAGR)

CFO/ Liabilities: 30.18 Interest Coverage: 28.39x

Manhattan Associates Return on Assets: 19.89% Return on Equity: 32.05% FCF/ Share: $3.42 (11% CAGR)

CFO/ Liabilities: 75.04 Interest Coverage: No debt

* Data compiled from Bloomberg data

Operational, Market, and Economic Risks in the National Setting

SAP MANH

Operational, Market, and Economic Risks in the Global Setting

SAP MANH

Solutions and Strategies to Handle Risks

SAP MANH

Financial Performance: Valuation and Volatility

SAP Beta (3yr): 1.11 P/E Ratio: 25.70 Long-Term Growth Rate: 12.24% PEG Ratio: 2.10 P/B: 4.47 *In-line with 3-year average

P/S: 5.13 *In-line with 3-year average

Dividend Yield: 1.72% *Covered 2.78x

MANH Beta (3yr): 1.02 P/E Ratio: 23.48 Long-Term Growth Rate: 21.74% PEG Ratio: 1.08 P/B: 3.15 *In-line with 3-year average

P/S: 7.33 *In-line with 3-year average

Dividend Yield: 0%Tech Sector Avg P/E: 14.50 Software Industry Avg P/E 14.13* Data compiled from Bloomberg data

Financial Performance: DuPont Analysis

SAP ROE: 21.09% Profit Margin: 21.98% Total Asset Turnover: 0.65 Equity Multiplier: 1.86

MANH ROE: 32.05% Profit Margin: 13.08% Total Asset Turnover: 1.44 Equity Multiplier: 1.61

ROE = Profit Margin * Total Asset Turnover * Equity Multiplier

So what does it mean?

* Data compiled from Bloomberg data

Financial Performance: Comparative Analysis

Security 1-Year Return 3-Year Return 5-Year Return

MANH 49.06% 34.28% 18.30%

SAP 55.38% 21.27% 11.03%

Technology Sector 14.81% 8.71% 3.31%

S&P 500 15.99% 10.47% 1.51%

** Data as of 12/31/2012

MANH SAP S&P500

* Data compiled from Bloomberg data

Investment Recommendation

With both companies being in the same industry, they face many of the same qualitative risks. As a result, we focused largely on the quantitative metrics of each and came to the conclusion that while both companies appear to be sound investments that will likely outperform the S&P 500 in the coming year, we would prefer to own Manhattan Associates due to its higher expected growth, lower relative valuation, and seemingly stronger balance sheet.

SAP Tgt Price: $97 MANH Tgt Price: $8523% premium 41% premium

Questions?

Thank you!